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The American Auto Industry: Continuing to Be Led By Geniuses

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It always galls me when people blame the United Auto Workers for the decline of the American auto industry in the 1970s. Those lazy American workers ruined cars! I never got this. Did Ford, GM, and Chrysler allow unions to help make production or other business decisions? Hell no. In fact, this was a major goal of Walter Reuther after World War II but he lost this battle decisively and the 1950 so-called Treaty of Detroit was basically a compromise where the UAW would have no control over the industry and the car companies wouldn’t open their books to the union in exchange for good wages and benefits.

In any case, it’s not as if American car companies have excelled at leadership since then. And I find this Ford decision utterly baffling.

Ford Motor Co. reported a $1.7 billion profit for the first quarter of 2018, but the company says it’s planning big changes — such as phasing out all cars except for the Mustang and a crossover vehicle in the North American market, so it can focus on SUVs and trucks.

“Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America,” Ford said.

The cuts will take place over the next few years, Ford said. Over that time, it will phase out longstanding brands such as the Ford Fiesta and Taurus from the North American market.

Ford is going to simply eliminate everything but trucks, SUVs, and the Mustang. Do the sales numbers back up Ford’s claims?

With the planned cuts, Ford will say farewell to the Fusion sedan, of which 43,176 have been sold so far in 2018 — and the Focus, of which Ford has sold 35,046 cars this year. Over the same period, Ford has sold 19,164 Mustangs.

Hmmm…

So if I am to be a good unionist and a good American–by these standards pushed by the car companies–I have to buy a vehicle I don’t want? As a driver of a union-made Ford Focus, my options are to either a) purchase a ridiculously large vehicle I don’t want the next time I have to buy a car or b) purchase a car from a different company, one that might well be Honda or Toyota. Which is fine–we are long past the point where nationalist arguments about Buy American made any sense at all. But the American car companies contempt for small vehicles is nearly as strong now as it was in 1972. I get that they make more profit off overpriced trucks and SUVs, but simply ceding large parts of the market to other companies seems very poorly conceived. But what’s new from the Big Three?

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